TRADE:USDJPY: BUY@118.700 Post-NFP Wave Cnt + Structure + Cypher

FX:USDJPY   U.S. Dollar / Japanese Yen
1490 28 19
This trade is based on my wave count and a post -NFP reaction as well as some minor sr structure. What do I mean by that? This is where just pure experience comes into play. I don't have stats or anything to back this up but usually when the NFP goes in the opposite direction of what the wave count expectancy is expecting prices to head towards, the reaction post-NFP will be to resume the path. Is this ALWAYS the case? No. By all means, NO! But in this instance, the NFP has done nothing to change the wave count and I am still expecting an up move to complete this wave 4 and also to finish off this consolidation pattern provided my wave count is correct. If it is, then this up move MUST happen.

A POTENTIAL cypher pattern has also developed with the C point yet to be set. I've marked the cypher C point MAX level and that level will also serve as my stop loss because if prices declined past there, not only would it invalidate the cypher but it would also break below the wave (b) (large blue one) of the overall correction and therefore would invalidate my wave count as it is and force me to re-assess.

As mentioned, I am now LONG on this pair and expecting an up move into the completion of wave 4. While this up move may look like a trend move and I suspect many people will jump on and start calling for a long-term uptrend to develop, that's not my opinion. It is only a finishing corrective move to the consolidation pattern. But I'll deal with that if/when that happens. For now, I will be placing my stops below the wave (b) (large blue) and the cypher MAX C point because if price drop below there, then my wave count could be wrong and I'll need to re-assess the overall situation. But more importantly, this trade has a better than 6:1 R;R ratio. So it's well-worth the risk. I have marked points along the way where I will probably take profits.

Please keep in mind that I am not giving any trading signals or trade calls here. Only providing my own trade thoughts for your benefit and insight as to my trading technique and style. Please don't ask if you should or should not take the trade or ask for stop loss and take profit levels. Any SL or TP given on my trades are my own I have used for my trade and are not recommendations for you to use. If you are not sure, then you do not have a trading plan for yourself in place. I suggest you make one before you continue to do any trading!

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thank you for shareing,i like your chart.
i have 2 questions need your help:
1. is there a contradiction between (a)2015-8-28_(b)2015-9-4_(c) and (W)(X)(Y)?
2. wave (W) is a triangle like your chart,but wave w cant be a triangle in my rules, triangle wave usually appears in 4 wave, the wave b, the wave y (w - x, y) and z wave (w - x - y - x- z),what do you think it?
thank you
Question #1: What contradiction are you referring?
Question #2: Triangles occur in wave 4's as you say. That is correct. This entire corrective wave is a wave 4. Triangles can also be a part of a complex correction of a corrective wave as in wxy or wxyxz also as you say. But there is no rule stating that triangles can only appear in the y or z positions. Yes, it is more likely that the ending leg of a wxy or wxyxz will contain a triangle but triangles can appear in either the w, y or z positions.

My take on triangles and wave theory is this: First, triangles do not always need to be labeled as triangles depending on your POV. You can easily ignore it as a triangle and just label as individual corrective abc waves and trade them that way. We as traders only observe it as a triangle so that we can more easily make sense of the waves and hopefully predict the next move because we know that a triangle has 5 legs and that when the E leg completes, we should see an opposite wave commence. Therefore, we place a trade assuming that opposite wave will occur. That is the only reason we mark a triangle. So when we see something that looks like a triangle, we trade it as a triangle.. I've said many times that I am not a traditionalist when it comes to wave theory. In fact, I won't even consider myself an "Elliottician" as many times, I find fault with "Elliott" wave theory that many times unnecessarily complicates things when a simpler explanation will suffice. "KISS" theory is more important to my trading strategy than Elliott Wave Theory. Like in this case with the triangle I placed in the W position. Can it be in the W position in a WXY complex correction? Answer is Yes, it can but not common. But the point is: why worry about it? Is it a triangle? Well, if it looks like one and trades like one, then it is one. And is there more correction behind it? Yes, there is. So that means the triangle is in the W position then, right? That's all that matters. It doesn't matter whether it SUPPOSED to be in the Y leg or Z leg. It is there and I traded it as a triangle and made good money off of it. That is ALL that matters. If Elliotticians consider that wrong, then does it mean I shouldn't have traded it and made money off of it just because it should not be in the W position? Of course not! This is what is called "trade what you see". It does not matter if it was in the W position or the Y or Z position. Now that does not mean that I don't care at all about the rules and guidelines. Of course, I will try to "fit" the waves correctly into the proper positions according to the wave theory rules so that it makes sense but having the absolute correct wave count is not the most important thing. Being on the right side of the market and making pips is the most important thing. So it I have an inaccurate count but it still leads me to be in the right side of the market, that is what matters.

Hope that makes it more clear to you.

That is actually the purpose of wave theory. To use wave rules and guidelines to hopefully be able to predict the next move and profit from it.
+3 Reply
Dem0n EverythingForex
Thank you for your take time to answer my question, your answer is very detailed and very philosophical, worth me to think seriously.let me have views a "listen togentleman a words, the bullet hole in my" feeling
I think I didn't need to say too much, in all your answer is a big help to me, In this heartfelt thanks.
and why the dollar will go up ??? if the data came out lower ???
EverythingForex yevgeny.shirshoff
First, I don't worry about what the news says. I worry about what the chart says. Second, it is the theory that all fundamental news is already been absorbed into the chart data. Most of the time, I find this to be true. If you only follow the price action on the chart, it really does not matter what prices do or don't do during news. If you just follow the price action and trade accordingly, you will be on the right side regardless of the news.

For example, if you look at the weekly or monthly chart of USDJPY, I challenge you to find the previous NFP bars of past months without referring to the date at the bottom of the chart. You can't. So you see that really, the NFP and other "big news" does not have as much as an impact as you might think. Yes, on a daily and hourly basis where most people trade, it does. But the point is, the NFP does not "CHANGE" the direction of the market.
EverythingForex EverythingForex
For example, this trade I have on this pair. Why did I know it would go up when the NFP data was bad? First, when I posted this trade, I still had not gone and looked at the NFP data and did not know the numbers. All I knew was that prices went down where my chart says it should go up. So I waited until the NFP "craziness" was done by watching the momentum and saw it hit a structure level and stop there. Because I've been reading the price action and the chart was telling me that prices "should've" been going up and not down, I knew that at some point, logic and reason would return and prices would again follow the "proper" path which is up. Knowing that, I placed the LONG trade and voila! It went up and I banked +88 pips just like that. So you see. I did not "trade" the news. I traded the price action and the chart.
yevgeny.shirshoff EverythingForex
that is, there is a trend a trend ... .. and the price to move higher , so it will move on ... And what do you think about the option price movements to 118,906 ??? thanks
yevgeny.shirshoff EverythingForex
Sori ... Not to 118,906 , and a 116 ... thanks
yevgeny.shirshoff yevgeny.shirshoff
i understand your idea,when seen weekly chart... thanks
Will you tell me what software you use to create your charts and where I can learn to use it as I study and learn from your posts. I don't "copy" your trades. I'm very much dedicated to learning technical analysis so I can participate and share ideas in this community.

Thanks in advance
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